Haulage prices soar as springtime surge gathers pace
Haulage prices increased by 3.6% in April as the traditional springtime price surge gathered pace. Average prices increased from an index of 109.5 at the end of March to 113.4 at the end of April.
One leading cause of the price increase is likely a springtime jolt of economic activity, although compounding factors clearly remain. One such factor is the UK’s current 10.1% inflation rate, which is now higher than any other country in the Western Europe. Simply put, high inflation is continually increasing haulage companies’ costs, and that is most likely increasing haulage prices.
Meanwhile, post-Brexit frictions are also placing upwards pressure on haulage prices. Post-Brexit bureaucracies have increased haulage costs, and delays at borders now seem far from fleeting. Indeed, the transport industry and the wider public were reminded of the ongoing issues once again last month when the UK suffered a nationwide shortage of common bell peppers.
While the post-Brexit frictions seem persistent, the Bank of England is taking stringent measures to reduce inflation. The Bank increased UK interest rates for the 12th month in a row earlier this month. The new rates encourage saving and discourage spending, which should cool economic activity and, as a result, help to bring inflation down. Meanwhile, the UK government has proposed industry reforms that would help ease ongoing driver shortages and is also taking steps to get more people back to work post covid-19. Combined, the two measures should help stabilise climbing haulage prices.
Elsewhere, fuel prices continued to fall in April, with diesel and petrol prices down by 2.4% and 0.7% respectively. Road transport companies will be hoping the UK’s diesel prices in particular continue to fall, which would increase margins and free up funds for investment. Ongoing diesel price reductions may even allow hauliers, at some point, to charge lower prices.
Lyall Cresswell, CEO of HX parent brand Transport Exchange Group, said, “Falling diesel prices is very welcome news for the industry. It reduces a day-to-day expense for everyone, making every mile cheaper.
“But it’s clear that there are more permanent problems affecting hauliers’ and couriers’ prices. One of those is the driver shortage, so it’s encouraging to see the government once again taking action to get new drivers on the road.
“Another issue altogether is supply chain costs. Streamlining operations through digital solutions can help greatly here, so I’d encourage any road freight transport company to build digital tools into everyday processes. Then they’ll be more able to weather any costly supply chain disruptions.”
The HX Price Index will continue to track changes in haulage prices in May 2023.
